Japan's two-year government bond auction has seen robust demand, as reported on January 30. According to Jin10, despite growing expectations that the Bank of Japan may tighten its monetary policy, the higher yields have attracted significant investor interest. Miki Den, a senior rate strategist at Nikko Securities, noted that the bid-to-cover ratio for this auction was among the higher ranges for two-year bond auctions in the current fiscal year, indicating a favorable outcome. However, Den anticipates that the yields on two-year government bonds may decline, albeit with limited downside potential due to the risk of interest rate hikes.